Oil-for-food probe damns UN staff

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A probe into the United Nations' oil-for-food program in Iraq
was sharply critical of UN management and found that the official
running the operation had steered oil contracts to a particular
firm.

"We have found in each case that the procurement process was
tainted, failing to follow the established rules of the
organisation designed to assure fairness and accountability,"
former US Federal Reserve chairman Paul Volcker wrote in
yesterday's Wall Street Journal editorial page.

But Mr Volcker said the administration of the program appeared
to be "free of systematic or widespread abuse".

Mr Volcker was appointed by the UN to head an independent
inquiry into the now-defunct $67 billion program intended to ease
the hardship of ordinary Iraqis under 1990 UN sanctions. He was to
release a preliminary report on the program overnight and a final
one in June.

"The findings do not make for pleasant reading," he said.

He also said that allegations of conflict of interest by
Secretary-General Kofi Annan - whose son Kojo had worked in West
Africa for a firm under contract to the United Nations in Iraq -
would not be part of a preliminary report.

Most damning for the world body is Mr Volcker's description of
UN Undersecretary-General Benon Sevan, the man in charge of the UN
program, who is accused of steering oil contracts to a firm in the
Middle East.

"The evidence is conclusive that Mr Sevan, in effectively
participating in the selection of purchasers of oil under the
program, placed himself in an irreconcilable conflict of interest,
in violation both of specific UN rules and of the broad
responsibility of an international civil servant to adhere to
highest standards of trust and integrity," Mr Volcker wrote.

In documents Iraq released after the fall of Saddam Hussein's
regime, Mr Sevan is accused of asking Baghdad to give an oil
contract to Africa Middle East Petroleum, a Swiss-based oil trading
company. He is alleged to have received oil allocations that could
be turned into cash from Iraq, but has vigorously denied this.

Mr Volcker made no mention of any bribes to Mr Sevan, a veteran
UN employee in many of the world's trouble spots.

But he said that the UN audit process was "underfunded and
undermanned" and unable to meet effectively "the challenge posed by
a really unique, massive and complex program of humanitarian
assistance."